Touch ID requires your password when Mac restarts after Monterey update

Updated MacOS Monterey on a M1 Mac Air and after the restart the user login screen message is "Touch ID requires your password when Mac restarts" and then display two fields to be entered (Previous Password and Enter Password). Irrespective of what is entered the following notice is displayed “Your account has been disabled. Contact your system administrator for more information.”.

Did the Recovery reboot and then used Recovery > Utilities > Terminal and then entered “resetpassword” in bash. Then get the Reset Password modal however have only one option “Deactivate Mac…” OR Exit back to Recovery Utilities. Selected Deactivate option and received the Reset Password modal again with the chance to set a new password. Set the New and Verify passwords and eventually received notices that the password has been changed and can now restart.

Do the restart and then end at the same user login screen message is "Touch ID requires your password when Mac restarts" and then display two fields to be entered (Previous Password and Enter Password).